Maybank IB Views

Saturday, May 14, 2011

Malayan Banking: Not Rated
On track; to surpass internal targets

Within expectations. Maybank's results were within expectations, with 9MFY11 net profit of RM3.3b (+13.4% YoY) at 76% of consensus. 3QFY11 net profit growth of 10.9% YoY was largely the product of lower provisions (-68% YoY), as operating profit was flat (+0.3% YoY). FY11 should close above management's targeted ROE of 14% based on 9M's annualized ROE of 15%.

Genting RM11.20: Buy
Another royal flush from Singapore subsidiary

Large positive swing in GENS' earnings. We expect Genting's share price to perform well today after 52%-owned Genting Singapore's (GENS SP) 1Q11 results exceeded expectations (house and street) on above theoretical VIP win rate of 3.8%. GENS should continue to take the lion's share of VIP volume thanks to its generous credit policy. Maintain Buy on Genting with a fine-tuned SOP-based TP of RM12.76.

Media Prima RM2.68: Buy
A flawless quarter

Still recording YoY growth. Despite a relatively high base in the preceding quarter, Media Prima (MPR) still managed to record 1Q11 core net profit growth of 25% YoY. QoQ net profit contracted by 43% on seasonally lower ad spend but we expect ad spend to pick up as the year progresses. We maintain our Buy call and RM3.06 target price on 17x 1-year forward PER.

JT International RM7.16: Buy
Special dividend "coming soon"

Maintain Buy. JTI's 1Q11 net profit of RM34.5m (-8.6% YoY, +26.2% QoQ) formed 24% of our and 25% of consensus full-year forecasts. We see a further upside in the share price, to be boosted by a potential special dividend payout. Maintain Buy with an unchanged DCF-based target price of RM8.10 which implies 13x 2012 PER.

The FBM KLCI fell 3.74 points to close at 1,532.29 yesterday. Its resistance areas of 1,534 and 1,550 will cap market gains, whilst the obvious support areas are located at 1,516 and 1,532. Due to the DJIA’s rebound tone last night, we will see the FBM KLCI with steady price action today.

Daily trading idea is a Short-Term Buy call on MHC.

Other Local News
MAS: Escalating fuel costs may affect target. Higher fuel costs will make it harder for Malaysia Airlines (MAS) to achieve its profit target this year but is unlikely to make a downward revision. (Source: Business Times)

Digi: Mulls higher dividend payout to offset lower net profit. Bhd is planning to increase dividend payout ratio to offset the expected lower net profit in future of its network modernizing plan. (Source:

IGB: Allocates RM3b for overseas assets. IGB Corp Bhd has allocated up to RM3b for various assets acquisitions overseas this year, comprising mixed developments and hotels in Europe and the United States. (Source: The Star)

BIMB: May buy Bank Mualamat. BIMB Holdings Bhd has confirmed that both Khazanah Nasional Bhd and DRB-Hicom Bhd have offered to sell Bank Mualamat Malaysia Bhd to it. (Source: The Edge Financial Daily)

E&U: Main terms agreed for Bakun dam power purchase agreement. Sarawak Energy Bhd (SEB) and Sarawak Hidro Sdn Bhd have reached an agreement on the main terms of the power purchase agreement (PPA) for electricity produced by Bakun hydro dam, including the tariff that SEB would have to pay to Sarawak Hidro. (Source: The Star)

FDI: Tokuyama Corp to invest a further RM3.72b in Sarawak. Tokuyama Corp of Japan will invest a further JPY100b (RM3.72b) to build a second polycrystalline silicon plant in the Samalaju Industrial Park in Bintulu, Sarawak. The second-phase plant will produce polycrystalline silicon for solar cells, with an annual production capacity of 13,800 t. (Source: The Star)


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